The five-month takeover battle between oil major Shell and Thai firm PTT Exploration & Production for explorer Cove Energy could be thrashed out in an auction process, under a ruling by Britain's Takeover Panel.

As the two-horse race enters its final stages, the acquisitions regulator said today that if a competitive situation still exists on July 16th then an auction process would be put into play.

Shell and PTT have been vying to buy Cove because of its stake in huge gas fields discovered off the coast of Mozambique in East Africa, a region tipped to become one of the world's largest gas exporters.

Shell's current £1.165 billion bid was trumped by PTT's bid in May.

With the end of the offer period approaching and in a situation which the Takeover Panel deems to be competitive - with neither side having submitted a final offer - the Panel can decide to push the parties into an auction procedure.

These situations are rare with the last one occurring in 2008.

Cove shares have consistently traded above the level of PTT's £1.23 billion, 240 pence per share offer as investors have betted a higher bid from Shell would materialise. They closed at 274 pence yesterday.

Reuters